On the Growth of an Internet Startup

We’re in for a rough year. You heard it here first (*tongue in cheek*); there is some indication that the economy is chugging along more slowly than usual and with Obama in office, we’re in for “Change.” That can only mean one thing, well, three things: tightening belts, possible layoffs, maybe some mortgage foreclosures. Take my advice, put some money aside in a nice safe bank, for Nostradamus foretells a rainy day…

Is it all that bad though or it is one of those cycles that encourages consolidation, sorts out stellar companies, and drives innovation? The turn of the century saw a strikingly similar turn of events from which we can learn much. Suggesting overwhelming demand for what we do. Internet startups (which we’ll clarify as pure-play online companies) as well as tech, travel, and even automotive startups that have or need an online presence, are coming to me with greater frequency with one recurring and startling theme, “we’re growing – help us grow more efficiently and significantly.”

I’ve been asked so many times that I have to preface the remainder of this post with an apology that I just couldn’t keep this brief. I’ve been agonizing over the length this article but cognizant that the answer to such a challenge can’t be addressed with a top 5 list, tactical suggestions, or redirects to other resources. Startups, given their demand for efficiency, performance, growth, and a suite of employees passionate about the companies with which they work (all of whom are capable of wearing dozens of hats), are better positioned to thrive now given the expertise many of us can offer. But it is the combined strategy and implementation of effective online marketing that creates the synergy behind significant growth.

It seems of late that the investment community is not hesitant but patient. Like Clark Kent, bored at the Daily Planet, waiting to rip off the shroud hiding his true intention, a shroud not surprisingly created by the media, to fly in to rescue a business person in need. Now is the time to strike at market share, resources, and investment capital that one might mistakenly assume is stagnant. But in this time of Top Ramen and garden vegetables, poor ideas and slow companies fall behind those with opportunity and talent. The challenge, is surmounting them with few resources and even less of a budget. So… let’s talk:

Growing quickly and efficiently – now

What are my priorities for rapid, significant growth, with as little impact to the bottom line as possible? Exciting, is that as a marketer with a startup, your role is as closely aligned with the CEO as that of Timothy Geithner to Ben Bernanke… hmm… not the right analogy? Perhaps it is; the job that you both have in one way or another is to sell your idea, your business, and the plan. While the traditional responsibility of a marketer is leads, awareness, branding, traffic, or some derivation thereof, a startup marketing role demands strategic thinking about the direction of the business and industry, and the tactical application of a breadth of effective marketing techniques to sell the company (so to speak). You have potential investors, partners, clients, customers, and users to reach and little time or resources with which to do it. With a talented crew and unique idea, the company is going to the Oscars, your job is to make sure you are the darling of the red carpet.

Alright, I hear you, enough with the prolonged preface, what’s the advice?
(and you might be surprised… the top priority is NOT SEO).

1. Analytics. Data.
I’m not talking about market research or focus groups. Your first priority isn’t a study in customer demands or VC desires (I’m assuming though that your founder and fearless leader has already done this). No, as a marketer, your priority is to know what works. Get yourself familiar with Google Analytics. Put it on the site. Right now; I’ll wait…
Spend tomorrow, and probably the rest of the week, experiencing nothing else but the rich insight it delivers to the organization. Don’t worry about alternative platforms, you can’t afford Omniture and emerging platforms, though appealing, have yet to be vetted. Google Analytics will tell you what pages on the site have the greatest interest and retention, from where your audience is coming, what keywords result in traffic, how well paid search works, and much more.

I can’t stress this enough. Before you do anything else, get your data resources in place. If you are willy-nilly-ey (that’s a hard word to put in the right tense) trying things with twitter, search, email, social networks, lead gen, blogs… blah blah blah, you are wasting your time and, likely, the company’s chance of success as you ultimately don’t have a clue what resonates. Don’t turn to an agency or vendor for answers, don’t let your engineers and product folks deploy analytics, it is your job to know.

2. Social Marketing
(“still not SEO?” no, but let me preface this by highlighting that I’m not referring buzz worthy social marketing such as Facebook or widgets)
As a startup, you have a few near-certainties going for you: 1. You don’t have a lot of content to SEO (yet), 2. No one knows who you are, so even if you had something to optimize, 3. No one is linking to you. Optimized content that you do have, has little chance of appearing prominently. And all the hullabaloo about “link building” is a waste of resources when you should be building relationships.

The magic of the order of these priorities is that they compound on one another, creating synergy on behalf of the growth of your site. Fostering a community and the excitement about your company, your founders, and the magic being done is the best use of your time; creating awareness, building links, referrals, and support, and setting you up for significant adoption as these pieces fall in to place.

We’re not talking about widgets and viral Zombies here; critical now is that you foster two way communication with early adopters through a blog, facebook groups, LinkedIn company profiles, twitter, and heck… Yahoo Answers. Your goal is to lift the curtain to your business a little, bringing those that will support you into the club, while also acting as a member of the community; speaking outside the developments of your company to return the favor those adopters have lent to you.

An effective blog is such a difficult and yet important platform to setup and maintain that few recognize its significant potential in creating awareness and benefiting SEO. Most are familiar with blogging through Blogger or a web service which WILL FAIL to attract significant readership. If you have experience with anything other than a custom, optimized blog, forget what you have learned. Comprehensively integrating your blog with digg, twitter, facebook (heh, I just noticed the trend in lower case Web 2.0 company names), and email platforms (Yes Virginia, people still prefer email over confusing technologies like RSS) is key to fostering that two way communication in that they dynamically update the internet with your contributions to your industry. Though still relatively small, (1382% growth aside), technologies like Twitter let you communicate directly with your audience, opening the dialogue, so long as you acknowledge and support the fact that few are interested in your latest release or announcement.

Download WordPress and setup a blog. Any online marketer worth their salt should know the basics of a blog platform (not Blogger or TypePad but a real blog CMS). Don’t turn to your developers for any more than server and database. Do NOT look to a PR or ad agency to set this up. A blog is the voice of the company, your voice, the voice through which your constituents can learn, criticize, and comment. You better know full well how it works and how to maximize its potential. So long as you don’t just sell the company or give boring updates on your progress, your blog will establish who you are, what you do, and attract those most attractive of customers, early adopters. Talk about your industry, developments, players in the space, even related products and services; in the process, sprinkle in that anecdote on how business is going. If your company is revolutionizing the industry in which it resides, act like it; participate in the community and make yourself known.

Extending that comes by way of plugins and tools that dynamically update your social networks and profiles with content from the blog. Your voice, announced. Automatically feed posts and comments to twitter, LinkedIn, facebook, and the like to draw the audience into ongoing discussions and retain their interest in your business. Think outside the box on how to make this work; here’s one to get you going, comment below if you have other suggestions or get in touch.

3. Public Relations
(whoa whoa whoa… still not search??)
Ancillary to social marketing is your relationship with the broader community. The opinion of your company held by peers, partners, and, most importantly, potential investors is paramount and you need to lean on formal PR to validate and strengthen the story being told.

A good PR resource is the first best spent item line in your budget. The catch is, what = good at this stage?

In my mind there are 3 approaches to PR – I’m oversimplifying for the sake of my explanation so bear with me: Press releases, media relations, and public relations. That better known classification always runs the risk of confusing folks as technically, your media relations are key to reaching the public and time spent on public relations is better considered time with your industry.

My hope, my expectation, is that you and your CEO have relationships with the key stakeholders amongst the public: industry thought leaders, conference organizers, major Universities, and even industry corporate advisers and venture capitalists. On the other hand, if your approach to PR has simply been a series of press releases and a “Press” page on your corporate site, you are likely disappointed. The takeaway therein is that you should be doing both of those things yourself and if you are hiring someone to do them for you, let me know so I avoid investing with you. Your effort with social marketing makes YOU the voice of the company to your public and your voice should be heard directly by the industry. A press release and link from your site is as effective as putting a needle in a haystack and hoping the media is looking for it. Paying for either of those services is a waste of time; HOWEVER, money spent to retain an agency that gives you access to the media is money well spent. At this stage, your RFP for the right PR agency consists of, “who do you know?” and “how well?”

4. SEO
(ahh… thank you) *Really, you’d be surprised at how many people look at me as though I’m nuts for not saying SEO is the top priority. Let’s get in to why first:

I’ve already said this but let me reiterate; spinning cycles and resources on optimizing content that has little chance of prominent placement (this early in the game) is waste of resources. As a startup, you will benefit much more by ensuring the site is setup properly from the start, therein avoiding all the painless SEO through which companies are anguishing today. What do I mean by that? I’d posit that the majority of SEO has to do with site architecture, structure, and hierarchy. Not keyword density or content, not links. Without a properly designed site, your labor as a “Marketing SEO,” working on page copy, titles, and building links, is for naught of search engines can’t index your site.

Your job is to foster an SEO organization. Everyone in the company from BD to IT should feel SEO twinkling in their toes. At a large, established, process oriented company, this is a near impossible task. This, perhaps reveals why companies dump hundreds of thousands of dollars on agencies to “Do SEO” for them. Hogwash. Their attempts continually fail simply because the more sophisticated technical and architectural considerations are overlooked (or simply unrealized) by outside parties or those optimizing based on the top 10 lists. Your company needs to understand SEO; A company inherantly cognizant of SEO will outpace the growth of ANY other business that treats SEO as a Marketing program/campaign or something driven by 3rd parties. Success comes when Business Development fosters partnerships that create links, Engineers build websites that search engines can index, Customer Service and Sales engage your customers with relationships that extend your work with twitter, blogs, and social networks with “retweets,” sharing, positive reviews, posts of their own, referrals, and comments. Simply: Everyone optimizes; subconsciously.

Still not enough synergy to convince you to spend more time with the first priorities? Consider how they facilitate one another. Obviously, you’ve now organically built links through your outreach, added content to your site through the blogs, and stirred up some buzz in the process, but your efforts pay off much more substantially through lesser known benefits. The dynamic updates we enabled seed new search channels which deliver to users immediate and timely results. After all, Google results are nice but when someone wants to know what’s going on right now, someone more likely to convert, you want to have built an innovative marketing organization that proactively grabs their attention with less effort and expense on your part.

5. Paid Marketing (arbitrage)
Can’t afford it, not worth our attention, we have no money to spend, that doesn’t work for us… the list of closed minds rambles on and on. Think again (even if your response is “we can’t afford it… now“. With analytics in place you have the science and perspective to effectively manage a performance based marketing spend. Arbitrage. Profitable, or at least acceptable, paid growth.

Foremost, make sure Google Analytics is set up completely and effectively, with funnels, goals, and values, to properly evaluate the quality of traffic to the site. You MUST set cost per acquisition (CPA) metrics against those goals. How much are you willing to spend to acquire 1 new customer? The values set are values you are comfortable paying to acquire that new user be it through conversion, consumption, registration, or mere time spent. No one can tell you what’s right for your business so don’t look to industry benchmarks or competitor metrics – the one question that best reveals a flaw in someone’s logic is the query for “average conversion rate” – Your metric might be $.07, $.70, or $7.00. Your CPA is dependent on your financial model, business priorities, site performance, awareness and relative recognition, brand strength, and a host of other factors unique to your business.

Start small, with paid search and Adwords, there is no harm in spending a few hundred dollars a month to test the waters. Keep it simple, with less than 50 keywords; manageable enough that you can run a minimum of 5 ads per keyword – you aren’t branding here – your objective is to identify keywords and calls-to-action which efficiently drive demand for your business. Monitor them closely. If they don’t perform in 24 hours, lower your bids, change ad copy, or shut them down and move on.

As you catch on to the basics in search, turn more to Analytics to ensure performance against your CPA numbers and increase your sophistication by valuing more than one action (both a registration AND page views per visit are worth something). Basic arbitrage is really this simple: If the performance of keywords exceed your ROI expectations, increase the bid and budget, growing your search marketing channel and spend in such a way that your CEO will be pleased, investors ecstatic, and board astounded by your brilliance.

As we wrap up, let me point out again the importance of the order in which I’ve presented these priorities. You should not spend dollar one on marketing through email, banners, radio, print, SEM, or any other channel until you can track performance, have fostered your industry to create some awareness, and understand how arbitrage works so that you don’t waste the precious capital with which your company is working.

“email, banners, radio, print” …??
That’s right, arbitrage has just as much application to other marketing activities as it does within its best known use case (that is, paid search). Having learned the science and mastered analytics, spread your budget to email, ads, and other channels. Start with the same model: keep it simple, trying 1-2 at a time, but run more than one ad type so you can figure out what resonates with the audience within each channel. That said, a key differentiation is that you have to make sure you set up tracking codes in Google for each campaign, link, and ad type. Be as specific, granular, as possible so you can quickly identify quickly what works and what needs to be abandoned. Google does this automatically with keywords so we didn’t overlook such tracking, it was already in place. Rinse and repeat. over and over… and over….

Now look back on how much we’ve spent and the ROI therein. You’ve designed an Marketing organization with little to no additional resources and few dollars spent. Your SEO is inherent to the business and benefits from industry, peer, and media support. Ad dollars spent drive traffic that pays off with more than just feet in the door. And you have a clue what works so that you can keep that crank turning.

This is what I do for a living. If I can help you do the same, let me know.

@ That Guy
Ask your Mom or neighbor what RSS does. Okay, rhetorical question, she may very well know RSS; point is, most don’t have a clue any more than middle America knows what a Twitter does 😉
More important point is that if you only offer subscription through RSS, you are handicapping the chances of increasing your readership from folks who A. don’t know RSS or B. don’t use RSS. Offering email subscription and auto-updated twitter gives choice.

Great article. You really nailed the value of WordPress vs. hosted blogging platforms. I just spent an hour on Friday trying to explain this to someone – should have read your article sooner!

I agree 100% that the company leadership has to think in terms of marketing and PR themselves. A company can’t outsource the development of their culture and values! I’m an outsource marketing guy, but no matter how good my team is, there’s just no substitute for a client firm that really understands their own identity and positioning, and wants to build honest relationships in their sphere of activity.

Others’ Thoughts

Paul is hands down one of the best people to work with in the startup ecosystem in Austin, TX.

Ben JenkinsFounder & CEODone.comAustin, TX

Hit the ground running and has been a great contributor to the polishing of our business. His expert knowledge of SEO, strategy and marketing will enable VChain Solutions to gain even more traction than we are currently experiencing.

James VinsonFounder & CEOVChain SolutionsAustin, TX

Easily one of my favorite people in tech. Passionate, knowledgeable, connector and tenacious are the words that come to mind if I were to label him. Paul’s a constant hustler (in a good way) who always has time to talk about anything related to technology, marketing and all things startup related. He’s a great person to have on your team and an even better person to just simply know.

Marc MapesFounder & Head of ProducteiTalentAustin, TX

Providing Marketing and Strategy through the Clean Tech Open accelerator, Paul was readily available for a helping hand and opened his extensive network to us helping us connect with thought leaders in our industry. I would recommend Paul as a mentor and definitely use him again.

Bar BruhisCo-founderVChain SolutionsAustin, TX

Paul provided a much more comprehensive strategy to our marketing and branding. He’s an expert in his field and knows how to deliver results. He took the time to understand our business and forge a multi-faceted approach to marketing our brand. We continue to leverage Paul’s talents and I wouldn’t hesitate to recommend him.

Erik DreyerFounderTuffwerxAustin, TX

Paul is a true Go-Giver! His willingness to share his expertise in Digital Marketing is priceless. I highly recommend anyone who is starting a company or who is starting to invest in marketing read his Startups articles on his website and then make sure you meet with him. I only wish I had met Paul earlier when I first started my company.

David DoranCEOTexas Systems GroupAustin, TX

In the startup world, everything is rough waters. Paul came to us a couple years ago when he found out what we were building. He believed in our idea and wanted us to achieve our goals. In the past two years I’ve known Paul, he has always been there to mentor and guide me through the rough waters he’s seen through having once been our shoes. His advice is rock solid, practical and most importantly – executable. As an individual, he holds to his word, he’s dedicated and he’s one of the few wh…

Nik DaftaryEntrepreneurDaftasanaSan Francisco, CA

Paul has been an advisor on numerous initiatives over the years. His knowledge and experience in all the aspects of digital marketing and media product strategy is matched with a creativity unique in the industry. Time spent “talking shop” with Paul has effectively become the foundation for my understanding of how digital marketing works and how to navigate an increasingly.

David GehringVP PartnershipsGuardian NewsSan Francisco, CA

Paul has been an invaluable adviser to our start-up. His experience in the events space as well as his knowledge of today’s marketing stack has taken us a long ways from what we started with. His honest assessment of both our company and the Austin start-up scene has proven to be immensely helpful in guiding our strategy and direction.

Michael WeiSolutions ArchitectOptimizelyAustin, TX

Paul has the great ability to juggle 8 balls at once and is a jack of all trades. He is not only helpful on everything related to press, PR, marketing and social media, but has also added value by providing strategic direction/advice and even gets his hands dirty with technical development. He can be relied upon as a trusted partner and project manager.